. Excercise 2: Find the underlined parts that are incorrect in these statements and correct them:11. The guantity theory of money suggests that an increase in the money supply increasesBreal output proportionately.12. In the long run, an increase in the money supply tends to have an effect on realB.vanables but no effect on nominal variables.D13. Inflation tends to stimulate saving because it raises the after-tax real return to savingB14. If inflation tuns out to be highe than people expected, wealth is redistributed toBlenders from borrowers.1615. Monetary neutrality means that a change in the money supply doesn't cause a changeBin anything at allD4.5.

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Excercise 2: Find the underlined parts that are incorrect in these statements and correct them: 11. The guantity theory of money suggests that an increase in the money supply increases B real output proportionately.

Excercise 2: Find the underlined parts that are incorrect in these statements and correct them: 11. The guantity theory of money suggests that an increase in the money supply increases B real output proportionately.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 8PA

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Question

Excercise 2: Find the underlined parts that are incorrect in these statements and correct them:
11. The guantity theory of money suggests that an increase in the money supply increases
B
real output proportionately.
12. In the long run, an increase in the money supply tends to have an effect on real
B.
vanables but no effect on nominal variables.
D
13. Inflation tends to stimulate saving because it raises the after-tax real return to saving
B
14. If inflation tuns out to be highe than people expected, wealth is redistributed to
B
lenders from borrowers.
16
15. Monetary neutrality means that a change in the money supply doesn't cause a change
B
in anything at all
D
4.
5.

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